Factors Affecting Banks’ Deposit Growth – A Case Commercial Bank of Ethiopia (CBE)
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Date
2017-06
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Addis Ababa University
Abstract
This study aimed to identify factors affecting bank deposit growth by taking Commercial
Bank of Ethiopia as evidence. Thus, the researcher adopts mixed research approach.
Questionnaire is used to gather information from the employees of the bank particularly
for those employees who actively participated in deposit mobilization tasks. Regarding to
the secondary data; time series data covering 1982 - 2016 was analysed. First, the time
series data were assessed using descriptive statistics for the variables. Second, estimated
model was a single regression equation with deposit as the dependent variable and
explanatory variables as economic growth (gross domestic product), inflation, deposit
interest rate, exchange rate, number of branch, population growth, effects of financial
innovation and dummy variable. The results from economic analysis showed that all the
explanatory variables were positively correlated with the explained variable. Among these
variables, branch opening is an important strategy for deposit growth and highly
significant than others. GDP or economic growth of the country is also next to branch
opening is significantly affects CBE’s deposit. And finally, the study had recommended
what should be done to encouraging deposits growth by Commercial bank of Ethiopia for
the benefit of the domestic deposit mobilization, like the need for strong public awareness
and sustainability of the prize linked scheme.
Description
A Thesis Submitted to the Department of Accounting and Finance
Presented in Partial Fulfillment of the Requirements for the
Degree of Master of Science in Accounting and Finance
Keywords
Bank Deposits, Commercial Banks, Determinants of bank deposits